USERRA Turns 30 This Year: An Overview of the Law

In October, the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) turns 30 years old. USERRA is often overlooked by employers, but it provides some of the most expansive employee protections in the U.S. Its broad scope is especially relevant in light of recent national and world events that may increase participation in military service.

In October 2023, for example, the U.S. Army announced efforts to modernize its recruiting process, and the U.S. Department of Defense has requested public funding to increase new recruits across all branches of the military. Worsening geopolitical tensions may ultimately necessitate additional troop deployments to Europe and the Middle East. And state National Guard units—which comprise soldiers and airmen who also hold civilian jobs—have encountered more frequent activation, including the New York National Guard’s activation to patrol the New York City subway in March 2024.

In light of these developments, it is critical that employers understand the many protections USERRA provides to their military and veteran employees.

Who Is Covered by USERRA?

Unlike other federal civil rights statutes, USERRA applies to virtually all employers, regardless of size or income. The list of covered employers includes, but is not limited to, public and private employers, successor-in-interest employers, foreign employers in the U.S., and U.S. employers abroad. USERRA also provides for expansive joint employer liability, meaning that more than one employer may be held liable for a USERRA violation.

All past, present, and potential service members are protected by USERRA. Both current employees and job applicants are covered, regardless of whether they are full time, part time, temporary, or seasonal. Covered employees and applicants are protected whether their service is or was compulsory—that is, the result of a draft—or voluntary, such as National Guard service.

However, an otherwise-covered employee is disqualified from asserting USERRA rights if they: 1) separated from service with a dishonorable, bad conduct, or “other than honorable” discharge; 2) were dismissed as a commissioned officer in certain situations involving a court martial or by order of the president in a time of war; or 3) were dropped from the rolls after being absent without authority for more than three months or imprisoned by a civilian court.

What Protections Does USERRA Provide?

USERRA provides a number of expansive protections for covered employees and applicants.

Protection against discrimination and retaliation. USERRA prohibits discrimination against an employee or applicant based on their past military service, current military obligations, or intent to serve. USERRA also prohibits employers from retaliating against employees or applicants for attempting to exercise or enforce their rights under USERRA or for testifying or assisting in a proceeding under USERRA.

Leave rights. Providing one of the longest leave entitlements under any federal or state statute, USERRA entitles each covered employee to a maximum of five years of leave for military service, calculated on a cumulative basis. However, service in a number of common scenarios are exempt from the five-year cap, including required training for reservists and National Guard members and retention on active duty during a domestic emergency or national security situation.

Critically, employers cannot demand written orders or other official documentation concerning an employee’s service prior to the employee’s departure from work. Advance notice of the need for leave is required, but this notice can be informal and verbal.

While on military leave, employees must be treated as if they are on a furlough or leave of absence and are generally entitled to participate in any rights and benefits available to similarly situated employees on leave. Covered employees must be permitted to use any vacation leave accrued prior to leave during periods of military service, though they cannot be required to do so.

USERRA mandates the continuation of health benefits to employees on military leave for up to two years after the leave of absence begins or for the period of service plus time to apply for re-employment—whichever period is shorter. Employees may be asked to pay up to 102 percent of the full premium for coverage for absences lasting 31 days or more.

Re-employment rights and the escalator principle. USERRA’s re-employment rights are one of the law’s most unique and important features.

Employees returning from leave are entitled to prompt re-employment, subject to USERRA’s “escalator principle.” According to this principle, covered employees are not simply entitled to reinstatement to the job they held prior to leave. Rather, they are entitled to placement into the position they would have occupied with reasonable certainty if they had remained continuously working during the leave, with the full seniority, benefits, and pay of that position. The escalator principle applies to both discretionary and nondiscretionary promotions, raises, and bonuses, and an employer may rely on military performance reports to assess an employee’s suitability for a promotion, raise, or other benefit.

However, the escalator principle can operate in both directions: An employee may be placed in a lesser position or denied re-employment altogether if economic circumstances, reorganizations, or layoffs would have affected the employee had they not been absent for service.

Employees are not required to tell their employer whether they intend to seek re-employment prior to departing for leave, and they are still entitled to re-employment even if they initially deny an intent to seek it. However, USERRA requires covered employees to report back to work within a prescribed time frame based on their length of service, ranging from the calendar day following completion of service to 90 days after completion of service.

If an employee’s absence exceeds 31days, an employer may request documentation showing that:

• The employee’s application for re-employment is timely.
• The employee has not exceeded the five-year service limitation.
• The employee’s separation from service was not due to a disqualifying reason.

But, if the requested documentation is unavailable or does not exist, the need for documentation must be excused.

Upon re-employment, employers must provide any training necessary to update the returning service member’s skills and qualify them for the essential tasks of the position. Employers must also reasonably accommodate any disabilities incurred or aggravated during the performance of service. Notably, USERRA defines “disability” more broadly than the Americans with Disabilities Act and does not require a showing that the disability substantially limits one or more major life activities—a fact that employers ignore at their peril.

Protection from discharge. In addition to mandating re-employment in accordance with the escalator principle, USERRA also effectively overrides the at-will employment doctrine for re-employed service members, albeit for a limited time period.

Re-employed service members who served for more than 30 days but less than 181 days cannot be terminated without cause for 180 days from the date of their re-employment. This period increases to one year for employees who served for more than 180 days.

Employers are often unaware of this provision in USERRA.

Enforcement of USERRA

Aggrieved employees or applicants can sue to enforce their rights under USERRA in court, and courts broadly construe USERRA in favor of military service members.

Unlike other federal civil rights statutes, USERRA has no statute of limitations. USERRA also does not require employees to exhaust administrative remedies before proceeding to court.

Damages available for a successful USERRA cause of action include injunctive relief, reinstatement, back pay, restoration of benefits, and liquidated damages doubling the amount of compensatory damages for willful violations. USERRA is also conducive to class-action treatment, which can be both expensive and difficult for employers to manage.

What Should Employers Do to Comply?

Given USERRA’s expansive remedial scheme along with its attendant threat of litigation, employes should ensure that they deeply understand the statute’s requirements, which are, in many respects, unusual and counterintuitive. Employers should ensure that they have a military policy and review it periodically to ensure that it complies with USERRA’s requirements.

In light of USERRA’s complexity, employers should also maintain a protocol or checklist outlining the necessary steps to take in the event that an employee requests military leave or re-employment. Employers should further confirm that they have properly coordinated with any benefits providers in advance of any employee’s departure for military leave.

Finally, employers must ensure that managers are thoroughly trained on USERRA’s requirements in order to make re-employment determinations, avoid improper termination decisions, and minimize the risk of retaliation claims.

Lindsay Stone and Christopher Collins are attorneys with Sheppard Mullin in New York City.